Exercise 10-5 Utilizing a Constrained Resource [LO10-5] Outdoor Luggage Inc. mak
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Question
Exercise 10-5 Utilizing a Constrained Resource [LO10-5]
Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the company’s most popular models appear below.
The total time available on the plastic injection molding machine is the constraint in the production process. What is the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? (Round your answers to 2 decimal places.)
HOME
ACCESSIBILITY
PREVIEW
+
Which product would be the most profitable use of this constraint?
a. ski guard
b. fishing guard
c. golf guard
Which product would be the least profitable use of this constraint?
a. ski guard
b. fishing guard
c. golf guard
A severe shortage of plastic pellets has required the company to cut back its production so much that the plastic injection molding machine is no longer the bottleneck. Instead, the constraint is the total available pounds of plastic pellets. What is contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? (Round your answers to 2 decimal places.)
HOME
ACCESSIBILITY
PREVIEW
+
Which product would be the most profitable use of this constraint?
A. Ski guard
B. fishing guard
C. golf guard
Outdoor Luggage Inc. makes high-end hard-sided luggage for sports equipment. Data concerning three of the company’s most popular models appear below.
Explanation / Answer
The total time available on the plastic injection molding machine is the constraint in the production process. What is the contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? (Round your answers to 2 decimal places.) HOME ACCESSIBILITY PREVIEW Ski Guard Golf Guard Fishing Guard Selling price per unit 250 320 215 Variable cost per unit 110 210 155 Contribution margin per unit 140 110 60 Plastic injection molding machine processing time required to produce one unit 14 minutes 13 minutes 11 minutes Contribution margin per unit of the constrained resource 10 per minute 8.46153846 per minute 5.4545455 per minute + 1b. Which product would be the most profitable use of this constraint? a. ski guard 1c. Which product would be the least profitable use of this constraint? Fishing Guard 2a. A severe shortage of plastic pellets has required the company to cut back its production so much that the plastic injection molding machine is no longer the bottleneck. Instead, the constraint is the total available pounds of plastic pellets. What is contribution margin per unit of the constrained resources for Ski Guard, Golf Guard and Fishing Guard? (Round your answers to 2 decimal places.) Ski Guard Golf Guard Fishing Guard Selling price per unit 250 320 215 Variable cost per unit 110 210 155 Contribution margin per unit 140 110 60 Pounds of plastic pellets required to produce one unit 9 Pounds 10 Pounds 14 Pounds Contribution margin per unit of the constrained resource 15.5555556 Per Pound 11 Per Pound 4.2857143 Per Pound + 2b. Which product would be the most profitable use of this constraint? A. Ski guard Which product would be the least profitable use of this constraint? C. Fishing Gaurds Requirement 3 Sky Guard Largest Unit contribution margin
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